Happiness by the numbers

thinkerI always enjoyed school. Once I got to college at the University of South Florida, though, I really had to hone in on the classes that were going to be required for my major whether I liked them or not. The one and only class that gave me fits, and the one and only class I ever had to repeat in college was (cue the scary music) statistics. I love research but statistics and I never saw eye to eye. It was much the same way in Algebra. I wanted to know WHY X=Y. I wanted to know WHY one formula was right but other perfectly good formula was not. I’ve always enjoyed the study of human behavior and learning why we do the things we do so it seems fitting that statistics frustrated me because I could never get to the WHY.

Just the same, I’m a sucker for magazine articles about behavioral patterns that teach us why people do what they do. When I graduated from college with my degree in Social and Behavorial Sciences it wasn’t with the intention of putting my degree to use in real estate, but here I am. As a full time real estate Broker I have plenty of opportunities to study the behavioral patterns of buyers and sellers up close and personal. Understanding the nature of human behavior comes in handy a lot in this business.

So today when I got my copy of Insight magazine, a publication of the North Carolina Association of Realtors, I was immediately intrigued by one of the stories about the connection between how our homes are designed and our happiness. The article references a survey conducted by Houzz, one of my all time favorite websites, and according to the 6,000 people who responded here’s what makes us happy in our homes.

74% are happier after remodeling their home.
72% are happiest in rooms that are clean an organized.
42% find happiness in the living room while only 15% are happiest in the kitchen.
Men are 2 times more likely to find happiness from a big-screen TV.
74% prefer big windows.

Want more?

317 is the number of square feet by which the average new home size has increased since 2009.
29.7% was the percentage by which new vacation home sales jumped in 2013.
65% of home buyers want an “environment friendly” home.
70% said that if they were moving, they would buy instead of rent.

If you’re like me, you probably found more than one nugget of truth in these answers and possibly some surprises. I would like to be encouraged by the increases in vacation home sales and that people are in the mood to buy a home instead of renting. The increase in square footage was a surprise for me, though, considering the trend to downsize. The other surprise was the low percentage of people who are happiest in the kitchen. Kitchens and baths are two of the biggest selling points in any home so I’m flummoxed by that one. Maybe those folks just need a better kitchen.

Articles like this are fun. They aren’t hard scientific research, but they give us a small insight into how other people view their homes and what role their home plays in their day to day happiness. From the dawn of man we’ve sought shelter and place we can call our own.  It’s just human nature to want to come home at the end of the day to a place that makes us happy – whatever and wherever that may be.

If you are in the market for a “happy home” of your own, give us a call…. we’d love to help.

Sellers Corner – The Power of Marketing

About a month ago, we got a call from some folks who had been trying to sell their home. Evidently, it had not been going well with their existing agents and they wanted to talk to us about making a change. So we met them at their property and immediately fell in love with the entire package. It was an attractive, well maintained home in a great (actually fabulous) setting. The home was priced a little lower than we thought it could be, but otherwise their current listing sheet had a sufficient number of photos, room measurements were there, and there was an adequate, though not particularly compelling, description of the property.  So why hadn’t such a great property sold? The piece of the puzzle that was missing and the reason it hadn’t sold was marketing.

When we list properties we look for a “perk” –  something that screams for attention and makes buyers sit up and take notice. Not every property has a perk and sometimes it’s hard to find something special to hang your marketing hat on.  But that wasn’t the case here. This was a great home with wide river frontage, 15 minutes from some the best fly fishing and kayaking in the area, in a nice country setting, with views of the mountains. Any one of those things would be enough to work with but this home had it all and we recognized the potential and more importantly, we knew how to capitalize on it.

Several days later, we got another call from the sellers letting us know that the other agents had agreed to let them out of their listing agreement and they were ready to get started with us.

IMG_9636B&W_peSMRobert and I, along with Ace our real estate dog,  spent the better part of a day shooting new pictures and a video. The location was off a dirt road, along the river, and in the country, so we decided to do an “Andy of Mayberry” sort of opening.  The approach we took was to focus on the lifestyle. The house had a lot going for it, but it was the setting that was going to sell this property.  Finding a home in this price range (even after we raised the listing price $15,000) with this much river frontage isn’t something that comes along every day and that was the hook. We carried that theme into the description of the property on the listing sheet and in various print ads. When it was all said and done, the video went out on You Tube, onto our listing, and out to the world.

Fast forward 22 days after signing the listing papers with us.  The sellers have entertained 2 offers and are now under contract with one of them.  Plus, by using our pricing strategy they not only sold quickly, they sold for more money than they would have at the lower listing price.  They will close in a couple of weeks. Meanwhile, our phone continues to ring with inquiries from other agents and buyers who have seen the video and have an interest in the property.

There is a reason why companies large and small spend so much money on marketing….because it works. Real estate is no different. The minute you sign the listing papers, your home becomes a consumer product and just like the car you drive, the clothes you wear, or the ketchup you put on your french fries, your home will stand a better chance of selling if it is marketed properly.  Just ask these sellers!

 

 

 

How To Prepare For Your Home Inspection

The very idea of a home inspection can strike fear in the hearts of sellers but for buyers it’s a good way to learn everything you can about the home you are about to buy. The buyer pays for the home inspection and it is the inspector’s job is to discover all the flaws and faults of a home (real or perceived) then neatly detail them with pictures and descriptions in a written report for the buyer. It’s a great idea, in theory, but sometimes an inspection report can create controversy and cause unnecessary problems between a buyer and a seller. With a proactive seller and a fair-minded buyer, though, both parties can come through the process and head towards the closing table without too much drama.

What do sellers need to know?

As a seller, no matter how diligent you are, there is no way you will ever know everything about your home so you may as well anticipate that the inspector is going to find things. That’s what they are paid to do.  Sometimes, those “things” are significant like termite damage, water intrusion, faulty wiring, leaky plumbing, structural issues, or a high radon reading. Other “things” you will likely see are a lot less scary like a door that sticks, a loose railing on a deck, a missing face plate on an electrical plug, or a light that doesn’t work.  Big or small, the more things that show up on an inspection report the greater the anxiety level for the buyer. They are looking for some degree of assurance that they are buying a home that isn’t going need a lot of repairs right away and if the report shows a long list of things that need to be done, it can cause them to second guess their decision and no one wants that to happen. Sometimes, though a buyer’s expectation can be unreasonable and that’s when a good buyer’s agent should step in and help guide their client.  Sellers can short circuit this anxiety, though, by making sure the home has as few defects as possible and it begins with a note pad and a walk around your home.

INSPECTOR1. Check all your doors and windows. Does anything stick? Are the windows difficult to open and when they open, do they stay open? If not, add them to your list of things to be taken care of.

2. Check your plumbing. Do any faucets drip? Do you notice any clogged or slow draining sinks? Do all your outside faucets work? You may consider paying for a plumbing company to come inspect your home for you in advance to look for any damaged pipes, leaks, and especially water intrusion and get any problem areas taken care of before the home inspection.

3. Change all your air conditioning filters. If it’s been a while since you’ve turned your A/C or heat on, give it a test. Does everything heat and cool as it should? Like your plumbing, if it’s been a while since you have had your HVAC system serviced, now would be a good time to do that so you can take care of anything that might show up on the report.

4. Check your smoke and carbon monoxide detectors. Replace the batteries and make sure they work.

5. Check for burned out light bulbs. Sounds simple, but if a light doesn’t work, it will show up on the inspection report even if it is nothing more than a burned out bulb. The inspector’s report won’t indicate why a light doesn’t work, only that it doesn’t.

6. The tougher things to detect on your own are on the exterior and found in places you probably don’t visit often like the crawl space or the attic. On the exterior you want to look for any soft wood, a damaged shingle or a roofing nail that has popped up, a loose gutter, a loose flange around the chimney.  If you have a good handy man handy, do a preemptive inspection for those things and repair them. Structural issues are a little different. We recently had a seller who was required to install squash blocks in his floor joists.  If you aren’t a builder you probably would not know what those are or why they are important, but it’s the kind of thing a home inspector will point out and something a buyer will likely expect you to repair.

7. Look for any potential pests like ants, termites, bees, hornet nest. Treat if in doubt.

8. Look for any signs of water intrusion. Water can come from a number of sources and it’s never good. If you don’t know what to look for or if you don’t like poking around in your crawl space, add it to the list of things for a handy man or your plumber to look for.

Whatever repairs you decide to make be sure to keep receipts so you can demonstrate that the work has been done. Not every job requires a licensed professional, but if the repair involves a roof, plumbing, or anything structural, it’s a good practice to hire someone who is.

A word or two for buyers

Home inspection reports were created to give the buyer an opinion on the overall condition of the home and help them identify potential problems. They were never intended to be a big stick that you use to beat up a seller over every defect in a home. Unfortunately that is how some buyers approach it. Yes, a buyer can ask a seller to repair anything or everything on the report but a seller is under no obligation to repair anything.  This is where it gets a little tricky because in North Carolina a buyer can bail out on a contract during the due diligence period for any reason at all and a inspection report with a lot of recommended repairs can be just the ticket out.  It is certainly reasonable to ask a seller to make certain repairs or ask for a credit so you can make those repairs yourself but if a seller has agreed to a buyer’s offer that is far below the home’s real value, it’s reasonable to expect that a seller may be less inclined to be generous with what they will repair.

The bottom line?

Sellers, be proactive.  Prepare for the inspection by identifying as many issues as you can and addressing them before the inspection. Buyers, be reasonable. Every home has issues. Even a brand new home. So as my mother used to say “pick your battles”.  If there is a significant repair that is needed, work with the seller to determine the best way to deal with it and don’t sweat the small stuff.  With a proactive seller and a reasonable buyer, there is no reason why both parties can’t meet at the closing table with little or no drama.

 

 

 

Understanding Due Diligence

If you are buying or selling property in North Carolina you need to understand the ins and outs of Due Diligence.  It’s a wrinkle in the Offer to Purchase brought to us a couple of years ago by the good folks in Raleigh.

In the most general of terms, whether you are buying a home, a car, or a stock, “doing due diligence” is thought of as the time you do your research about whatever it is you are buying. But in real estate, it means a lot more and has real implications.
money
Before the real estate commission changed our contract, an Offer to Purchase was usually contingent on a buyer getting financing and on inspections.  Typically a buyer and seller would agree that a buyer could bail on a contract if the buyer was unable to get financing with the terms they were looking for or if the repairs exceeded a certain dollar amount. The repair contingency was especially problematic. There was a list of things that a buyer could expect a seller to repair, but 99% of buyers ignored that list and asked for anything and everything. The seller wasn’t required to do the repairs…..but the buyer didn’t have to buy, either.

Today’s Due Diligence feature allows a buyer to bail out on a contact for any reason at all as long as they do it before a certain date, time being of the essence. 
Whereas the escrow amount is held in a trust fund and credited back to the buyer at closing, a due diligence fee is money that the buyer pays directly to the seller which they keep regardless of whether the property closes or not. But too many buyers agents don’t include any due diligence fee in the offer.  From a buyer’s perspective, this all means that if they wake up one morning and decide they don’t like the color of the house, they can decide not to buy it and they have nothing to lose. In today’s vernacular, they don’t have any skin in the game. Our Offer to Purchase was already a very buyer friendly contract and with this new due diligence feature it’s a love fest.  But for the seller…..not so much.

From the seller’s perspective, due diligence creates a number of challenges that favors the buyer and leaves a seller in a precarious position. It starts when the contract is signed.  The MLS status is changed to “In Due Diligence” and the home no longer shows up as active. Anyone doing a search would not see that the home is “technically” still on the market or that the seller would likely entertain back up offers so more than likely showings stop. Plus, the time frame for a buyer due diligence period is entirely negotiable. It could be two weeks for a cash deal….it could be 45 or 60 days. It’s whatever the two parties agree to. But here’s the catch for sellers.  They have no guarantee that their buyer will go through with the deal at the end of this due diligence period.  Meanwhile, their home is off the market, and their future is in limbo.

Recently an agent I know had her seller’s home under contract.  It was a 45 day due diligence period and as that deadline approached, the sellers moved all of their belongings out of the house in anticipation that they would be moving. The due diligence deadline came and went. A week before the closing, the buyers walked. Luckily this savvy agent had gotten a hefty due diligence fee written into the contract and the sellers received some compensation along with the escrow amount. It doesn’t always work out that way. In another case, involving a land purchase, the buyers wanted the seller to do a variety of things that cost the seller a good bit of money. The seller, moving forward in good faith did all those things. A few days before the end of due diligence, the buyers walked and in this case, there was no due diligence fee for the seller.

Some agents are also writing contracts where the due diligence period ends one day and the closing is the next.  Shame on any seller’s agent who allows their seller to accept this as part of the contract because it creates an impossible scenario. If you are a seller, how fast are you willing to move out, knowing that the deal may fall through. What if you do, and the deal falls through? Then there are the attorneys. There is title work to be done before a property can close and no attorney I know would be willing to do that before the due diligence period has run out and there is some reasonable expectation that the property will close.  Expecting a property to close the day after due diligence is simply ludicrous and no home seller should sign a contract like that.

For the most part, the NC Offer to Purchase does little to protect the seller and if asked, I would tell the real estate commission that they need to do more.  Why are sellers treated so differently than buyers?  If a buyer can bail out for any reason, then shouldn’t a seller have that same option? If the buyer can walk because they found a house they like better, shouldn’t a seller be able to walk if they find another buyer with a better offer? Frankly, I don’t think any party should have a carte blanche pass for walking out of a contract without a really good reason and without compensation to the other side.  I don’t know if a mandatory due diligence fee equal to some percentage of the offer price is the right idea, but it’s a place to start.  I’m sure the real estate commission thought they were making things simpler by eliminating the financing and repair contingency. In some respect they have, but at what cost to the seller.   In the meantime, if you are selling your property in North Carolina,  make sure you understand the implications of due diligence and how to protect your interests.